What is the cost of equity if after-tax cost of debt percent

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Question 1: Springer, Inc. has a target debt-equity ratio of 0.72. Its WACC is 11.5 percent and the tax rate is 34 percent. What is the cost of equity if the after-tax cost of debt is 5.5 percent?

Option 1: 13.75 percent

Option 2: 14.41 percent

Option 3: 14.79 percent

Option 4: 15.82 percent

Reference no: EM132498013

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